When bank lending is repaid in full, the mortgage still sits on the title to your property. A question we often get asked is should I have this removed?
When you purchase a property and arrange bank financing for the purchase, as part of the process, on settlement a mortgage will be registered on the title to the property in favour of your bank. This secures the current borrowings but also any future borrowings that you may wish to arrange.
When lending is repaid in full you can have the mortgage discharged from the title.
To do so you need to instruct a solicitor to action this on your behalf. We then write to your bank for discharge instructions and then we can register the discharge on the record of title for your property.
If potentially you were looking at borrowing more money from the bank down the track, you may wish to keep the mortgage sitting on the title. This would mean for example if you have new lending approved in the future you would not necessarily need to visit your solicitor and incur a further fee at that point as the bank already has security over your home.
If this is unlikely you may of course wish to have the mortgage discharged from the title.
This is something to be aware of where you owe other obligations to your bank, for example if you are helping your children purchase a property. If the financing is through the same bank that also have a mortgage on your property and if for example you are providing a personal guarantee, if the bank have mortgage security over your home that mortgage will secure your obligations pursuant to the guarantee.
